Northumbrian Water has soaked up the benefits of higher water prices with a 57% rise in first-half profits.
Utilities say price rises will provide better drinking water
Pre-tax profits rose to £49.4m ($98.2m) from £31.5m a year earlier, ahead of City expectations, the utility said.
Shares in water firms have rallied in the last week after regulator Ofwat gave its backing to a larger-than-expected rise in water prices.
Ofwat sanctioned a rise in customer bills in April amid concerns about the debt-ridden utility's financial state.
The move came after Northumbrian complained the collapse of a number of its big industrial customers was hitting business.
Now, the company, which serves 4.3 million customers in the north east of England, has been told it can increase its prices by 15% for the 2005-2010 period.
"We have made significant progress in our operating performance," said managing director John Cuthbert.
Ofwat announced last week that average household water bills in England and Wales can rise by £46 to £295 a year by 2009.
The average 18% increase is larger than expected, although the figure falls short of the 29% increase requested by water companies.
Water firms say the extra revenue is needed for maintenance, improvement work and environmental projects.
Cash is needed to fund upgrades to outdated sewerage systems and to provide better drinking water, utilities say.